Trade Show Commentary

They Didn’t Think We’d Notice?

In Trade Show Displays on March 14, 2011 at 6:43 pm

All I can say is that it doesn’t take a whole lot to raise your blood pressure about 50 points when you work in and around the trades show business any more. Here’s a great example of manipulating the calendar to generate big dollars for the trade show service contractors. This one is called the “artificial cut off date.”

What is that? Well, simply put, it means that the service contractor accepts freight at their advance warehouse usually beginning 30 days in advance of the move in date of the show. Normally, exhibitors can ship their freight to the warehouse, up to the service contractor’s move in date without any extra charge. Now that has changed, and the service contractor in Denver, Freeman

Shipping Crate

Shipping Crate

in this instance, now gives you 30 days, but they cut the service off at the normal rate “one week” before the exhibitor move in. Then, anything coming in during the last week is charged $16.25 per hundred weight with a minimum of 200 pounds, just for their inconvenience. Think about that. Who would suspect that if you can ship to this facility up to 30 days in advance and you schedule your freight to arrive a week in advance, that by doing so would be grounds for additional charges?

Now let’s be honest here. I was once a service contractor a number of years ago and even subcontracted shows from Freeman, who is a very good, upstanding and reputable company, but in the  interest of maximizing every dollar generating opportunity they can, this one seems like a blatant attempt to chisel away at the exhibitor’s pocket-book in a very cheap way! I say that because intuitively, no one would suspect that they getting themselves into this type of situation by having their freight arrive 5 days before the show moves in.

Service contractors normally don’t begin loading up the freight going to the show until a few days (depending on the size of the show) before their advance move in, and unless they are receiving the freight and putting the freight directly into a trailer that represents a specific geographic area on the show floor, they will use the advance time in the warehouse to segregate and batch the freight which is going into different areas on the show floor to allow for a more orderly move in. Therefore, receiving more advance freight up to the last-minute really doesn’t inconvenience their process much and alleviates what is normally a greater expense of receiving the freight at show site which is normally on a weekend which is obviously overtime.

What is gained by cutting off the regular advance warehouse rate off a week in advance? Money! At an additional $16.25 per hundred weight, if you calculate the amount of freight that normally comes in during the last week that the advance warehouse is open, this turns out to be very big dollars. But what about small shipments? Well, a small box is now charged an additional $32.50 per box if it arrives alone, on top of the existing material handling prices which might be as much as $90 or more per hundred weight with a minimum of 200 pounds. That little box get’s to be very valuable in a real hurry. It’s no wonder that more and more exhibitors are shipping directly to their hotels to avoid some of this.

I wrote this because the more you know, the more you and some of your clients can do to avoid a few of these very expensive pitfalls. But who’s to blame? Oddly enough it’s not the service contractors, but in my humble opinion,  the show managers who burden the service contractors with so many mandatory free-bees that they have to resort to this type of behavior to exist. It’s just sort of sad when it becomes so blatant.

Go to http://www.shopforexhibits.com for more information on trade show displays.

by Lowell Nickens, ShopForExhibits.com LinkedIn Profile

When Pricing Really Gets Out of Wack!

In Trade Show Displays on March 10, 2011 at 2:05 pm

I was just reflecting the other day on where the next round of price increases would take us; by that I mean, does the spiral ever end? Which way? Well, if for some of us the spiral goes up, then for the other it goes down.

Here’s the point. A week ago, I had a long time client tell me that he’d had enough. Specifically, he said that it costs Sacagawea Displaymore to move his trade show displays from the dock to his booth than to ship them across the entire country; so that meant a new booth for him that has fabric graphics and can be packaged in one or two at the most, flat panel molded shipping cases. You win; right? Well noooo….

Things aren’t always what they seem to be. In response to trade shows becoming less and less wood and more and more plastic, guess what? Yesssss! The material handling rates go up again, or the rules change and what you once shipped as standard freight, is now “special handling,” and it soon costs just as much as before and probably more.

Another good example is trade show electrical. This one is a great example because the spiral has been going up for enough years that you can actually see the insanity in it.  Here’s the progression:

  • First we start with an exhibitor who purchases a 500 watt electrical outlet for his pop up lights and a small demo 200W_Halogen-Lightmachine in the front of the booth.  Price is reasonable, we pay it, and we’re good to go. What you paid for is the sum total of all the electricity you need for your equipment. (in some cities, the electrician had to screw in the incandescent light bulbs but that was included)
  • Now, the show contractor isn’t meeting their profit forecast so they increase prices by eliminating  the use of extension cords from all booths and make it mandatory that you plug into the electricians “electrical drop.” Now you have to order a 500 watt outlet for the front of the booth and one for the back of the booth. You still don’t use more than 500 watts, but you pay for 1,000.
  • Because revenue and thus profits are falling from other revenue sources, the electricians have to not only charge for the power, but also for “labor” to install it. Are they doing anything more than what they’ve done for years? No, they just need more money and the good news for them is that they can charge for installing it and for UN installing it if there even is such a thing.
  • Now it’s the exhibitors turn to strike back; you invest in LED lights because for each 200 watt light you now only use 24 watts of power and can finally save on the amount of electricity that you need for your booth.  Once again,L.E.D. Light life is good!
  • The Empire Strikes Back! Not so fast on those savings Mr. Exhibitor! You really don’t know how to plug-in a light properly without potentially inflicting damage to those around you, so the electricians will assist you for another $75-$100 per booth for each and every show they service. Do the math. Let’s say we have a 300 booth show times $100 minus direct labor to install those pesky pop up lights and they’ve had a pretty good day. Oh, you lose!

When is this all going to end? It won’t until a few people in the industry realize that the old business model isn’t what it used to be, and a new reality needs to be embraced so the industry can live the life span that it was meant to live. Profits just aren’t going to be what they used to be. I don’t really know what the net effect is going to be as prices keep spiraling up, but in my perspective, it has to be significant. I’m even seeing the small guys who have pop ups forgoing  the pleasure of using that product in favor of 3 banner stands lined up next to one another. That’s when you go from minimal exposure to the ridiculous!

Finally, I must say that it also has a lot to do with the union model of representing workers. If keeping your stewards job is always based on “what have you done for me lately” then is it any wonder that prices keep spiraling?

Go to http://www.shopforexhibits.com for more information on trade show displays.

by  Lowell Nickens, ShopForExhibits.com LinkedIn Profile

A Definitive Guide to Understanding Trade Show Material Handling

In Trade Show Displays on February 11, 2012 at 11:56 am

No subject in the Trade Show Industry is as contentious as Material Handling or Drayage, and oddly enough, that’s not because of what people know about the subject. Far more often, it stems from what they don’t know and don’t understand and can’t learn about it that frustrates them. Even with a rate sheet in front of them, it’s often difficult to calculate what their final charge will be much less comprehend why the rates are so high.

Let me put it in perspective based on my background. I was an owner of a trade show contracting firm, who for 10 years during the 1980’s, witnessed phenomenal growth in the number of  trade show contractors in the industry. Then in the early 90’s, there was a vast contraction and consolidation of firms which summarily  led to the general landscape of what we see today. Both then, and now, material handling revenue is the big income generator for any trade show. But does it net more dollars than what a contractor has to give away to get it?

I’m going to lay out the thinking behind the rates. Even though you may not like the bottom line, you will at least begin to understand how it was created.

A Little Background

Trade show contractors have been in my opinion, and will always will be, operating at a distinct disadvantage when it comes to the income pie that’s divvied up from exhibitor generated revenues at trade shows; which is a result of an exclusive investment that the contractors alone makes to book an event. It’s sort of akin to the pro basketball player getting drafted as a lottery  pick and everyone in the player’s family now says; “We’re rich, We’re rich” even though they didn’t contribute materially to the valued position that the star finds himself in at that moment. So here are just a few of the new family members to be aware of when evaluating the overall situation:

1)    Show Management In many instances show management actually allows show contractors to bid on the show, and who in turn, use the money they receive to finance a variety of association expenses during the year or maybe their own salary or raises etc.. In addition, association executives will often only entertain bids where the contractor provides the carpet, registration, aisle banners, etc. at little or no cost to them in consideration of the having the right to be the “official service contractor.”

2)    Building Management This is the facility where the event is taking place, and management of these facilities has over the years, siphoned off a variety of services that the official show contractors used to provide such as cleaning, electrical, and rigging which were once high margin items in the contractors business.

3)    Outside Contractors  Quite a number of members of this group are allowed to come into the show floor and work directly with Exhibitors such as installation and dismantle labor, florists, models, specialty furniture etc..

4)    Unions; need I say more?

5)   Contractor-Sub Contractor Arrangement This type of arrangement occurs when a service contractor has a long term contract with an association for their events, but one of the events is being held in a city where the primary contractor doesn’t have an office. Typically the contractor will sub contract to a local contractor who does have the local structure and manpower to service the event. Seldom will the material handling rate in this scenario, be less than what it would otherwise been because there are now two mouths to feed.

Ask yourself how many of these  family members actually made a monetary contribution toward the registration counters, aisle banners, or aisle carpet?  The income circle has now been divided up in more ways than a Twinkie at a third grade sleepover, and the result for the show contractors is obvious. He keeps all the expense and shares the income, and the options for him to recoup the lost income are quite limited. First, let’s review some of the categories that contribute  to “material handling income” and see why they keep increasing.

How are Rates and Rate Categories Created?  The following rate categories were created to generate sufficient bottom line profit for the show contracting business after the family members in numbers 1 through 5 above, have been fed. 

Warehouse vs. Show Site Shipments
Typically, warehouse rates are more than show-site rates. The contractor is handling it more, receiving the freight in the warehouse, storing it, and transporting it to show-site. There are some instances where hotel shows and unique facilities don’t have the capacity, or have very limited capacity for receiving show-site shipments which is when they will publish a lower rate to the warehouse to encourage warehouse shipments and discourage show-site shipments.

Show-Site (Crated, Special Handling, Uncrated) Contractors publish an individual rate for each class of service. There is a separate rate for each based on real expense allocations, albeit the uncrated rate is generally more than the special handling rate for reasons you will see below.

Show-Site Crated
Shipments would fall into this category would be most LTL shipments. Think of it this way. If you can drive a forklift onto a truck or trailer, pick up a crate or pallet, and pull it off the truck without additional help from another worker, or the driver having to get off his or her forklift, then the freight will make this category.

Special Handling
Special handling occurs when a shipment needs to be unloaded from a street level, or from the side of a truck or flatbed. A trailer, like the type a van-line uses, which is cubed out and must be hand un-stacked, than pulled out of a trailer, would be charged at the special handling rate. If a shipment was double stacked on a LTL carrier and the load had to be hand un-stacked in the trailer, that shipment would get charged special handling. Also, exhibitors who bring freight to the show themselves on their personal vehicles or trailers will often be charged for special handling because their vehicles don’t match up to the height of the loading dock thus adding additional unloading time.

It is important to note that you can’t always associate a type of shipper (LTL, van line) with a class of material handling. There are some LTL companies that at their break point will stuff a trailer to the gills just like a van line, and that freight will get tagged with special handling… even though it left the point of origin, un-stacked.

Packages that are delivered by any carrier that doesn’t show up with paperwork stating who the shipper is, ship to company, show name, booth number, weight, etc., will qualify as special handling because it causes the contractor to fill out the paperwork themselves and incur added expense. This would include FedEx and UPS. An air freight carrier is the better option and always, and I mean always, ship all packages together so as to avoid paying multiple 200 pound minimums per shipment. 

Uncrated
Anything shipment coming in uncrated, pad wrapped, etc., will get charged the uncrated rate, and that rate is generally higher than the special handling rate. This category will often require a forklift driver and a person to steady the load etc. It’s never advisable to ship something to a show that’s uncrated, as there is a greater risk to the exhibitor’s merchandise, as well as a great risk to the contractor.

Risk
Somewhere, buried deep within each rate is a risk factor associated with handling each type of freight. Although the contractors have done a pretty good job of insulating themselves from payouts due to damage or loss, but they do have the workman’s compensation exposure which they can’t insulate themselves from. It is imperative that you as an exhibitor have your own business insurance plan to cover the potential damage or loss in moving your merchandise to and from show sites while in someone else’s care, custody, and control. If you don’t cover it, it won’t be covered!

Targeted vs Off Targeted Deliveries
This charge applies to deliveries to the advance warehouse as well as to the show site. Some contractors charge a percentage increase in the rate and others add-on a dollar amount per hundredweight. Either way, not being aware of the target dates can increase your cost by as much as 30%.

Final Tips and Tricks

If you as an exhibitor feel the need to have your own shipper pick up your merchandise, be sure to read the fine print of your service kit, and understand what time your driver must sign in at the marshalling yard in order to be allowed to pick up your freight. Missing this deadline might be one of the most costly miscues that you can make short of your shipping contractor’s failure to show up at all. Missing the deadline allows the contractor to force the freight off the floor and back to their warehouse, or automatically ship the freight back to you via their preferred carrier at a much higher rate. Also, always require  your carrier in advance, to agree to pay the difference if they fail to show up on time for the pick up, and the freight is forced off the floor.

Want to see how all of the above effects your material handling expenses, play around with our Trade Show Material Handling Calculator and see how small changes can make a big difference.

By Lowell Nickens, Google+ profile  and ShopForExhibits.com

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